Traditional Moves Toward Buying 2 Photo Companies

Traditional Industries said it agreed in principle to buy two photographic laboratories and their marketing organizations, but withheld identifying the privately held companies until a definitive merger agreement is reached.

Traditional is an Agoura Hills-based company that sells specifically ordered packages of pictures and other photographic and video services. Currently, Traditional’s photo processing is done by an outside lab.

The proposed mergers call for Traditional to initially pay a total of $2.14 million by issuing about 142,000 shares of its common stock. As much as $2.9 million more might be paid over the next four years on a formula pegged to the companies’ revenue growth.

“Our sales volume in photo processing and custom enlargements is now large enough to make owning our own labs profitable,” Traditional President Arland D. Dunn said in a statement.

Dunn also said the proposed acquisitions would give the company an additional $12 million in revenue and $1.2 million in profit. In the nine months that ended March 31, Traditional earned $3.72 million on revenue of $37 million.